On May 1, 2021, Vaughn Manufacturing purchased $1,555,000 of 12% bonds, interest payable on January 1 and July 1, for $1,406,500 plus accrued interest. The bonds mature on January 1, 2027. Amortization is recorded when interest is received by the straight-line method. (Assume bonds are available for sale.)
Prepare the journal entry for May 1, 2021.
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